Atlas Mara: What went wrong with the bank of Bob Diamond and Ashish Thakkar

Atlas Mara: What went wrong with the bank of Bob Diamond and Ashish Thakkar

Nkosana Moyo independent non-executive director of Old Mutual plc, African media expert Biola Alabi, British journalist Adrian Finighan, Nigeria’s Finance Minister Ngozi Okonjo-Iweala and Bob Diamond, director and co-founder of Atlas Mara, participate in a plenary session of the World Economic Forum in Abuja May 8, 2014. REUTERS/Afolabi Sotunde According to a member of Atlas Mara’s original executive team, “The story isn’t so much about people making mistakes, but about people down on their luck in the markets.”

This impartial verdict stood out from a host of comments made by a dozen investors and African market experts consulted back in October, when the banking group’s share price approached a singular historical threshold: the loss of 100% of its initial value.

On 20 October, the share was trading at around $0.30, representing a 97% drop compared with its IPO launch price of $9.83 on the London Stock Exchange in mid-December 2013.

Atlas Mara’s stated ambition at the time was to become a group operating in some 15 different sub-Saharan African countries. The timing seemed just right given that the post-2008 financial crisis recovery was in full swing. A string of disappointments

Atlas Mara has certainly had its share of misfortunes. In September 2014, when the African banking newcomer co-founded by Bob Diamond (the former CEO of the UK behemoth Barclays) and British-Ugandan entrepreneur Ashish Thakkar (who at the time was inaccurately praised as “Africa’s youngest billionaire”) announced its plans to acquire a minority stake in Union Bank of Nigeria, oil prices were averaging around $100 a barrel.

By December, oil prices had fallen to $60 a barrel and would remain at that level until 2018. Meanwhile, Nigeria’s economy entered a recession, contracting 1.62% in 2016.

Fast forward to this year, when oil prices have once again plummeted. By June, the agreement Atlas Mara announced just a few months before regarding the sale of four subsidiaries to the Kenyan giant Equity Group had fallen through.

READ MORE Kenya: Why Equity Bank broke off talks with Atlas Mara

The official reason given for the termination: uncertainties and additional costs resulting from the COVID-19 health and economic crisis. This was a tough setback for Atlas Mara because it made it harder for the company to find a way out of its precarious financial situation and restore investor confidence.

Though plummeting oil prices and the coronavirus crisis have impacted every economy, few groups have experienced such a severe bout […]

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